ED Arrest And Custody Under PMLA Not Invalidated By Later ECIR Addendum; Punjab & Haryana High Court
Isabella Mariam
The Punjab and Haryana High Court Single Bench of Justice Tribhuvan Dahiya has dismissed two writ petitions filed by promoter-directors of Ramprastha Promoters & Developers Pvt. Ltd., who sought to set aside their arrest, remand and the continuation of proceedings initiated by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002. The pleas stemmed from the ED’s probe into allegations that large sums collected from homebuyers for real-estate projects were diverted, giving rise to proceeds of crime. The Court held that the arrests could not be invalidated merely because additional predicate FIRs were later incorporated into the ECIR through an addendum and declined to interfere with the impugned arrest and custody orders on that ground.
The petitioners were accused of collecting substantial amounts from homebuyers for residential projects and failing to hand over possession over prolonged periods. It was alleged that the collected funds were diverted to group and non-group entities through loans and advances, resulting in proceeds of crime.
The Economic Offences Wing and Haryana Police had registered multiple FIRs against the petitioners for cheating and criminal conspiracy. Based on these predicate offences, the Enforcement Directorate registered an ECIR and initiated investigation. Searches were conducted at residential premises, accounts were frozen, and the petitioners were arrested. They were produced before the Special Court and remanded to ED custody on different dates.
The petitioners challenged the legality of their arrest, contending that mandatory requirements under Section 19 of the PMLA were violated, that no scheduled offence existed on the date of arrest, and that subsequent inclusion of additional FIRs through an addendum to the ECIR could not validate the arrest. The Enforcement Directorate opposed the petitions, asserting full statutory compliance and availability of material justifying arrest.
On the submission that one predicate FIR was linked to a stayed order, the Court stated: “The argument does not cut much ice for the reason, despite the order of stay the aforesaid FIR stands registered on 19.07.2019, and there is no restrain on further proceedings or investigation pursuant thereto by any Court of law. Nor has the registration of FIR been questioned by the petitioners. In these circumstances, non-consideration of interim order, dated 19.07.2019, by the authorised officer cannot be fatal to the impugned order of arrest passed against the petitioners under the PMLA.”
With respect to the reliance placed on settlements in two FIRs, the Court recorded: “there is no denying the fact that despite settlement(s) dated 21.01.2020, having been arrived at between the parties thereto prior to the date of petitioners’ arrest, the FIRs had not been cancelled at the time of registering the ECIR and carrying out investigation pursuant thereto. In fact, the allegations contained in these two FIRs concerning the scheduled offences were investigated and chargesheets had also been filed against the petitioners on 03.10.2020 and 04.01.2021, respectively. Nevertheless, the fact of settlement(s) was taken into account by the authorised officer as it finds mention in the relevant documents, including grounds of arrest.”
On the addendum point and the effect of later inclusion of FIRs in the ECIR, the Court stated: “Merely because these FIRs were made part of the ECIR later, by way of addendum dated 11.09.2025, it would not vitiate the petitioners’ arrest prior thereto on 21.07.2025. There is no restrain on the ED to investigate other FIRs noticed by it after registering the ECIR without making the same a part of the ECIR, nor is there any statutory provision creating such a fetter. Also, no procedure has been prescribed for taking on record new FIRs pertaining to scheduled offences that are discovered by the ED after registering the ECIR.”
While dealing with the nature of the ECIR and the consequence of non-addition of FIRs before arrest, the Court recorded: “ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with proceeds of crime. Thus, ECIR is not a statutory document, nor there is any provision in 2002 Act requiring Authority referred to in Section 48 to record ECIR or to furnish copy thereof to the accused unlike Section 154 of the 1973 Code.” It further stated: “non-addition of any FIR to such a document prior to arresting the accused, cannot have a bearing on the legality of arrest so as to term it illegal on that account. Therefore, their arrest cannot be termed illegal merely because the subsequently noticed FIRs have been added to the ECIR after the arrest.”
On the challenge to the arrest documentation and the scope of review, the Court stated: “The contention lacks merit as similarity of documents in itself cannot be a ground to conclude non-application of mind on the part of authorised officer in recording the same. A perusal of the documents shows the similarity is primarily in the facts of the case recorded therein. It is not stated to be violative of any prescribed procedure.” The Court also recorded: “Judicial review does not amount to a mini-trial or a merit review.”
The Court held that “there is no merit in the petitions and the same are dismissed. Pending miscellaneous application(s), if any, also stand(s) disposed of.”
Advocates Representing the Parties
For the Petitioners: Mr. Vikram Chaudhri, Senior Advocate; Mr. Sajal Bansal, Advocate; Ms. Hargun Sandhu, Advocate; Mr. Deepanshu Bansal, Advocate; Mr. Randeep Singh Rai, Senior Advocate; Mr. Sumer Singh Boparai, Advocate; Mr. Mukesh Mehra, Advocate; Mr. Rehat Mann, Advocate; Ms. Rubina Virmani, Advocate; Mr. Sirhaan Seth, Advocate; Mr. Abhilash Pathak, Advocate; Mr. Surya Pratap Singh, Advocate; Mr. Piyush Kumar, Advocate; Mr. Ankit Jangra, Advocate; Mr. Yogesh Bansal, Advocate
For the Respondents: Mr. Zoheb Hossain, Special Counsel; Mr. Lokesh Narang, Senior Panel Counsel; Ms. Shubhleen Dhariwal, Advocate; Mr. Kaushlendra Vikram, Advocate; Mr. Aakash Singla, Additional Advocate General, Haryana
Case TitleL: Arvind Walia v. Directorate of Enforcement & Anr.
Neutral Citation: 2026: PHHC:012387
Case Number: CRWP No. 8667 of 2025 (O&M) with CRWP No. 8750 of 2025
Bench: Justice Tribhuvan Dahiya
